The letting market for houses is beginning to show signs of recovery but the oversupply of flats is continuing to drive down rents, research has shown.

The number of houses available to let fell for the second month in a row during April, dropping by 1.5 per cent, while rents for larger properties rose for the second consecutive month, according to FindaProperty.com

But the supply of rental flats rose for the sixth month in a row, increasing by 2.8 per cent during April to stand 132 per cent higher than a year ago.

Unsurprisingly, the ongoing oversupply led to a further 0.7 per cent fall in average rents – the 13th month running in which they have declined.

Andrew Smith, head of research at FindaProperty.com, said: “The UK has become a tale of two very different markets.

“House rentals are seeing the start of a recovery with declining supply rates and price rises for the largest family homes.

“In contrast, the flats market has seen a much deeper downturn, with rental prices falling for 13 consecutive months and supply levels continuing to increase.”

The group said the reduction in the supply of houses available to rent was likely to be due to people who had previously listed their homes for both rent or sale, taking them off the market completely or returning to the sales market with a more realistic asking price.

The fall in stock levels is expected to lead to an increase in rents in the near future, with larger family homes leading the recovery.

By contrast, the supply of flats is increasing as these properties are proving harder to sell, as they are typically favoured by first-time buyers and buy-to-let landlords, both of whom are struggling to get mortgages in the current market.

Across both property types, rents averaged £819 a month during April.

That was down from £827 in March and more than £50 less than the £873 that landlords received in April last year.

Supply levels of all properties rose by 1.2 per cent during the month, the slowest rise since September last year, and just a tenth of the 12.1 per cent jump in properties to let seen during October.

The average time a property was on the market for between tenants also fell for the third month in a row, dropping to 63 days, although this was still 15 days longer than a year ago.

But the group warned that while the figures may suggest the rental market was close to the bottom, any recovery was likely to be slow.

Its research showed that supply levels were 144 per cent higher than in April last year.

It said the high level of supply showed that it was still a tenants’ market.

As a result, rents were not expected to begin rising until the second half of this year at the earliest.